Los Angeles Leads Nation in Industrial Vacancy
Los Angeles is leading the nation for industrial vacancy rate. According to a new report from Newmark Knight Frank, the market has a 1.3% vacancy rate and has seen 21 consecutive quarters below 2%. Net absorption also continues to outpace new construction activity, with 4.7 million square feet absorbed in 2019. The activity is largely attributed to the robust port system in the Los Angeles area.
The port system isn’t the only factor driving industrial activity to record highs year-after-year. McMillan notes the manufacturing industry and supply shortage are also putting downward pressure on the availability rate.
Competition for new supply will remain fierce, and vacancy should hover in the 1.0% range. Finally, we expect rents to increase by 6.0% +/- in 2020.
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